Post by Sapphire Capital on Sept 20, 2008 1:04:12 GMT 4
Valuation Effects of Cross-Listing in the United States: The Role of Home-Country Corruption
Magali Valero
University of MIchigan at Dearborn
September 2, 2008
Abstract:
This paper tests whether the benefits from cross-listing in the U.S. are due to an increase in minority shareholder protection by using a sample of non-U.S. firms that cross-listed on the NYSE and Nasdaq. Corruption is used as a primary measure of minority shareholder protection and is expected to exert an independent effect, since two countries with the same accounting and legal rules, but different corruption levels, represent different minority shareholder protection levels. The hypotheses and findings suggest that firms from more corrupt countries see increased benefits from the listing announcement as opposed to firms from less corrupt countries, even after controlling for the home countries' legal and accounting framework. Findings also indicate that the impact of corruption on the abnormal returns associated with a listing announcement is stronger for firms from countries that also lack strength in other accounting and legal rules.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1262311_code575048.pdf?abstractid=1262311&mirid=2
Magali Valero
University of MIchigan at Dearborn
September 2, 2008
Abstract:
This paper tests whether the benefits from cross-listing in the U.S. are due to an increase in minority shareholder protection by using a sample of non-U.S. firms that cross-listed on the NYSE and Nasdaq. Corruption is used as a primary measure of minority shareholder protection and is expected to exert an independent effect, since two countries with the same accounting and legal rules, but different corruption levels, represent different minority shareholder protection levels. The hypotheses and findings suggest that firms from more corrupt countries see increased benefits from the listing announcement as opposed to firms from less corrupt countries, even after controlling for the home countries' legal and accounting framework. Findings also indicate that the impact of corruption on the abnormal returns associated with a listing announcement is stronger for firms from countries that also lack strength in other accounting and legal rules.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1262311_code575048.pdf?abstractid=1262311&mirid=2